Wednesday, January 26, 2011

Analysis of the State of the Union Speech

Tonight's Status of the Union speech by President Obama signaled his move to the center.  Clearly, he has has to do this given the political losses suffered by the Democrats in the November mid-term elections.  The full text of the State of the Union Speech is here.

Three main themes come out of the speech - focus on business job creation, education and infrastructure spending.

President Obama's business job creation proposal signal a clear move to the center, if not to the right.  He proposal reviewing all government regulations to ensure they are not impairing job creation.  He proposed reducing the corporate tax rate, provided it was deficit neutral.   

President Obama focused on job creation via new green technology sector.   He said that job growth will come from innovation in clean, renewable green technology.  He set a goal to have one million electric cars on the road by 2015, and by 2035 80% of America's electricity will come from clean energy sources.

As an aside, electric vehicles through private innovation by Toyota, Nissan, Honda and Chevrolet are already being produced in the private sector without government subsidy.  President Obama's push for electric vehicles will hinge on public demand, and should not be hinged on government spending.  Our nation cannot afford that spending, and should let the free capitalist market dictate whether consumers want electric vehicles.  It is also surprising that diesel cars and clean bio fuels are not being pursued.

President Obama's next major focus was on education.  While he was correct that America's innovation hinges on education in science, technology, education and mathematics (STEM), he failed to encourage American students to enter these courses of study and careers in his speech. He did encourage Americans to heed the call of duty and enter the education field and become teachers.

Obama pushed the Race to the Top program, which really is their re- of No Child Left Behind.  Like No Child Left Behind, Obama's re-branded program Race to to Top pins federal funding on school performance.  This is not new.

What was new on education was the emphasis of education in science, technology, engineering and mathematics as this is key to innovation.  On this, Obama is correct.  He was also correct that we need more education in these core areas, if we are to reverse America's lagging performance in innovation.  He cited China as being the home to the largest private solar research facility and the home of the fastest computer.  Clearly, America must do better in innovation and focus on innovation to be a global leader in science, engineering and business development as a result of our innovation.

The next major focus of Obama's speech was infrastructure spending.  He cited that America's infrastructure is falling behind other global nations, which is true.  He stated our roads need repair, and we need to focus on high speed rail and high speed wireless Internet as our next major infrastructure push.

The need for high speed rail should be regional and centered around states with high population density, like in the Northeast.  He set a goal that with 25 years, 80% of Americans will have access to high speed rail.  While this may be a lofty goal and in same states and metropolitan areas needed, this may set up an eminent domain fight.  And state infrastructure planning, not federal must be involved. 

Obama's goal on high speed wireless Internet of having 98% of Americans having access to high-speed wireless Internet access within five years is not in the best interest of American taxpayer funding.  High speed Internet and high-speed wireless coverage is already the focus on major telecommunation giants such as Verizon Wireless, AT&T Wireless, T-Mobile, Sprint Nextel and Clear Wireless.  The American taxpayer should not fund taxpayer dollars to something that is driven by consumer demand.  All of these private wireless provers depend on having a dependable wireless infrastructure and have being using corporate profits to reinvest in the wireless infrastructure.  It needs to remain that way.

President Obama also focused on two smaller themes in speech.  He set the stage for the perhaps the political battle of 201 1, which is illegal immigration reform.  Health care reform was the battle of 2010, and illegal immigration reform will be the battle of 2011.  He stated students from abroad are being educated in our schools and universities and then the moving back to their native lands to compete against us.  Another blog post on this subject alone is in the works.

Obama finally got the message that America has a spending problem.  He warned Congress that it needs reduce the deficit.  Surprisingly, he asked for a review of all government agencies for overlap in function and will look to reduce duplication of duties.  He asked Congress to also look at streamlining the individual tax code.

Republicans responded with two separate rebuttals to Obama's speech.  The official response came from Rep. Paul Ryan (R-WI), House Budget Chairman:

Tea Party ally and Minnesota Representative Michelle Bachmann gave the Tea Party response:

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